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You Have To Live It To Believe It

Blind Spots

In the world of investing, having gone through a traumatic experience first-hand makes the difference between a cautious investor and a blind one. The scarred investor cannot think in the way the fresher, who hasn’t experienced the turmoil can. 

Our unique experiences impact our vision in ways we cannot comprehend on the surface.

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You Have To Live It To Believe It

You Have To Live It To Believe It

https://www.collaborativefund.com/blog/you-have-to-live-it-to-believe-it/

collaborativefund.com

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Key Ideas

Seeing Isn’t Believing

Most of us have heard stories of hardships and catastrophic events of the past, like the great depression, or the dot-com bust, but haven’t lived through it, and not experienced the real pain of the disaster.

Hearing stories about something that happened in the past isn’t enough to truly realize the lesson from them.

Blind Spots

In the world of investing, having gone through a traumatic experience first-hand makes the difference between a cautious investor and a blind one. The scarred investor cannot think in the way the fresher, who hasn’t experienced the turmoil can. 

Our unique experiences impact our vision in ways we cannot comprehend on the surface.

Learning From The Past

Different generations have different investment risk appetites, with the younger generation wanting to take bigger risks and going into uncharted waters without any experience.

The New Generation, who hasn’t experienced turmoil and loss, are good at getting rich. However, the older, scarred generation is good at staying rich due to their general pessimism and conservatism. There is a need to balance the two aspects while taking an investment decision. People with different experiences aren’t necessarily smarter than others but just have a different worldview.

The World In Our Minds

Each of us has a mental world in our minds, constructed by our thoughts, beliefs, education, and experiences. We have developed a coherent story around our chaotic and unpredictable world, and that becomes our mental model.

Different people will come to different conclusions even when provided the same information, due to their having completely different mental models.

Action Mode

People can be influenced by lived experiences and this has the capacity to guide their future decisions, as opposed to merely learning about something.

Example: If we hear about a young girl killed by a drunk driver, we feel bad, but hardly do anything about it. But If we are a parent of that young girl and went through the horror ourselves, we have the drive to do something helpful.

Expand Your Mind

When we hear different perspectives, stories and experiences, we temporarily get out of our ‘mental model’ and become humbled, as we realize that our worldview was just a tiny fraction of all the other views.

People have different, varied motivations and can make decisions that may look crazy to us as we haven’t taken the same life journey as they have. This can apply to investment decisions as well as the career choices that people make.

SIMILAR ARTICLES & IDEAS:

The Lessons Of History
The Lessons Of History

History is a treasure-house of learning, and as many books teaching us lessons from history point out, what was true in the medieval ages is often true even now, though the circumstances, technolog...

Voltaire
Voltaire

“History never repeats itself, but man always does.”

1920 and 2020

1920 is a hundred years apart from 2020, yet how people think is largely unchanged. Human behaviour is still hinged on greed, fear, opportunity, scarcity, and basic instincts.

We have no idea what will happen in the future, but we do have a good idea about how human beings might behave in certain situations.

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The Half-Life of Facts
The Half-Life of Facts

Facts decay over time. And the time it takes to disprove or replace half of it can be predicted.

Data in medicine become half as relevant in 2-3 years. For exact sciences, 2-4 years.

Half life of facts and compound knowledge

If we want our knowledge to compound, we’ll need to focus on the invariant general principles.

Half-lives show us that if we spend time learning something that changes quickly, we might be wasting our time. 

Have a Succession Plan

Alexander the Great built one of the largest empires in history in just a few short years, and it fell apart just as quickly. As soon as Alexander died, his generals carved up his empire into pi...

Know When To Take Big Risks

Prince William Of Orange led the Dutch rebellion against Spain, then the most powerful empire in the world. To stop the advance of the more powerful Spanish army he pulled down several dikes and flooded a large portion of the Dutch countryside, contributing largely to the defeat of the Spanish.

Recognize when you can't beat your competitors and find a way to differentiate yourself.

Maintain Your Flexibility

During the Cuban missile crisis, many of JFK's advisors advised a full military invasion of Cuba. JFK held off on these plans, opting instead for a naval blockade and negotiations with Soviet leaders, all while planning for a possible invasion if these tactics failed.

Don't commit yourself to a strategic path without first evaluating all of the options available to you.

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Best foods don’t have labels
Best foods don’t have labels

Because they are just one ingredient: avocado, lentils, blueberries, broccoli, almonds, etc.

There is no "best diet"

The “best” diet is a theme: an emphasis on vegetables, fruits, whole grains, beans, lentils, nuts, seeds, and plain water for thirst. 

That can be with or without seafood; with or without dairy; with or without eggs; with or without some meat; high or low in total fat.

The "Age" of vegetables
The best vegetables are likely to be fresh and locally sourced, but flash frozen is nearly as good (as freezing delays aging). Those “fresh” vegetables that spend a long time in storage or transit are probably the least nutritious.

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One of the reasons why Stoicism is enjoying a revival today is that it gives concrete answers to moral questions.
Aristotle gave us an alternative conception of happiness

It cannot be acquired by pleasurable experiences but only by identifying and realizing our own potential, moral and creative, in our specific environments, with our particular family, friends and colleagues, and helping others to do so. 

Time Is The Most Precious Resource

Time is the most precious resource. Death gives a sense of urgency, as any moment could be your last. It humbles you and should also deeply motivate you to not spend your time thoughtlessly.

Emotions Come From Within

Outside forces don’t make us feel things, our perceptions of them do. It’s easy to think otherwise, but doing so harms us and undermines our self-discipline.

The next time you run into an obstacle and feel resistance, don’t look at what’s around you. Instead, look within.

The People You Respect

Whatever you do, there are individuals that you can learn from. If you can’t talk to them, you can study their story, works, techniques, successes, and failures, and discover patterns of success you can apply to your life.

Be careful not to turn it into an exercise of comparison and expect your progress to be the same as theirs. Their teachings and principles are supposed to help you grow, learn, and create. 

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Near-death experiences (NDEs)
Near-death experiences (NDEs)

NDEs are triggered during a life-threatening situation when the body is injured by blunt trauma, e.g., a heart attack or shock.

Many survivors tell of leaving their damaged...

Negative NDEs experiences

Not all NDEs are positive - some can be frightening, with intense terror, anguish, loneliness, and despair. Distressing NDEs are underreported because of shame, social stigma, and pressure to conform to the positive NDEs.

A close encounter with death reminds us of the fragility of life and can reveal the layers of psychological suppression that prevents us from these uncomfortable thoughts.

The NDE phenomenon

A 2017 study found that NDEs were recalled with greater clarity and detail than either real or imagined situations were. In other words, NDEs were remembered as being more real than life itself.

NDEs are no more likely to occur in devout believers than in secular or nonpracticing subjects.

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Two of the biggest innovations
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Two of the biggest innovations of modern times are cars and airplanes. At first, every new invention looks like a toy. It takes decades for people to realise the potential of it.

Innovation is driven by incentives

There are three types of incentives:

  1. "If I don't figure this out, I might get fired." It will get you moving.
  2. "If I figure this out, I might help people and make a lot of money." It will produce creativity.
  3. "If we don't figure this out now, our very existence is threatened." Militaries deal with this, and it will fuel the most incredible problem-solving and innovation in a short time.

During World War II, there was a burst of scientific progress that took place. The government was in effect saying that if a discovery had any possible war value, then it had to be developed and put in use, regardless of the expense.

The conditions for big innovations to happen

The biggest innovations seldom happen when everyone's happy or safe. They happen when people are a little panicked and worried, and when they have to act quickly.

In 1932, the stock market fell by 89%. It was an economic disaster where almost a quarter of Americans were out of work. However, the 1930s was also the most productive and technologically progressive decade in history. Economist Alex Field writes that in 1941, the U.S. economy produced almost 40 percent more output than it had in 1929, with little increase in labor hours or private-sector capital input.

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The reasons we crave junk food
  1. The sensation of eating the food: what it tastes like, what it smells like and how it feels in your mouth.
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How craving are stimulated artificially
  • Salivary response: the more a food causes you to salivate, the more it will cover your taste buds.
  • Rapid food meltdown: this tells your brain that you’re not full, even though you’re eating a lot of calories.
  • Calorie density. junk foods are designed to convince your brain that it is getting nutrition, but to not fill you up.
  • Memories of past eating experiences: When you eat something tasty, your brain registers that feeling and will bring it up in the future.
Building better habits means changing your environment

Most people think that building better habits or changing your actions is all about willpower or motivation. But your environment has an incredible ability to shape your behavior.

Nowhere is this more true than with food.

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Emotional intelligence

It is the ability to manage our own emotions and react to the emotions of others.

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5 key areas of emotional intelligence
  • Self-awareness: it involves knowing your own feelings. 
  • Self-management: it involves being able to keep your emotions in check when they become disruptive.
  • Motivation, for the sake of personal joy, curiosity or the satisfaction of being productive.
  • Empathy: the skill and practice of reading the emotions of others and responding appropriately.
  • Social skills: this can include finding common ground with others, managing others in a work environment and being persuasive.
Improving self-awareness
  • Keep a journal of your emotions. At the end of every day, write down what happened to you, how you felt, and how you dealt with it. 
  • Ask for input from people who know you well about where your strengths and weaknesses lie, to gauge your perception from another’s point of view.
  • Slow down (or meditate). The next time you have an emotional reaction to something, try to pause before you react.

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